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NEW QUESTION # 351
After review of the financial institution's enterprise-wide anti-money laundering risk assessment, the new compliance officer identifies several deficiencies that need attention.
Which deficiency could lead to the highest potential for unmitigated risk?
- A. The risk assessment is managed by a different team from the previous assessment therefore disrupting continuity of institutional knowledge.
- B. The risk assessment does not anticipate potential risks even though the financial institution has no immediate plans involving those risks.
- C. The risk assessment is revisited too frequently thereby diverting critical resources from other compliance tasks.
- D. The risk assessment is several years old and does not cover all current products and services.
Answer: D
Explanation:
Explanation
https://www.wolfsberg-principles.com/sites/default/files/wb/pdfs/faqs/17.%20Wolfsberg-Risk-Assessment-FAQ How often should an enterprise-wide risk assessment take place? Regardless of the frequency with which an enterprise-wide risk assessment is undertaken, FIs are usually *****required to report annually *****on the status of the money laundering risk environment. This can take the form of an Annual Report or other types of reports. FIs should review their methodology on a regular basis (most likely annually) to ensure that any changes in internal or external factors are incorporated appropriately in order to arrive at the most accurate picture of risk possible Changes will need to be assessed in terms of a FI's ability to compare results year on year, otherwise potentially significant changes in the results may not be justifiable, clearly explained or understood.
NEW QUESTION # 352
What was the topic the Wolfsberg Group's first guidance addressed?
- A. Enhanced due diligence for high risk customers
- B. AML training for financial institution staff
- C. Private banking
- D. Merchant acquiring activities
Answer: C
Explanation:
Explanation
The Group first came together in 2000 at the Wolfsberg castle in Switzerland, accompanied by representatives of Transparency International, to draft anti-money laundering guidelines for private banking
NEW QUESTION # 353
On discovering employees had unintentionally provided assistance to customers who were structuring transactions, an anti-money laundering specialist should recommend
- A. Providing remedial training to these employees.
- B. Contacting law enforcement to monitor these employees.
- C. Transferring these employees to another branch.
- D. Beginning termination procedures for these employees.
Answer: B
Explanation:
Structuring is the practice of breaking down large amounts of cash into smaller transactions to avoid triggering currency transaction reports (CTRs) or suspicious activity reports (SARs) by financial institutions.
CTRs are required for cash deposits or withdrawals of more than $10,000 in the United States, and SARs are filed when there is a reasonable suspicion of money laundering or other illicit activity. By making multiple deposits of less than $10,000 at different tellers, the owner of the retail store is attempting to evade the reporting requirements and conceal the source or destination of the funds. This is a common technique used by money launderers in the placement stage of the money laundering process, when they try to introduce illegal proceeds into the financial system. Structuring is illegal under the Bank Secrecy Act and can result in civil and criminal penalties.
References:
6: CAMS Certification Package - 6th Edition | ACAMS, Chapter 2: Money Laundering Risks and Methods, page 43
1: Structuring Cash Deposits, Withdrawals, & Transactions Risk, Golding & Golding
2: Structuring - Wikipedia
NEW QUESTION # 354
What indicates potential money laundering activity by a lawyer?
- A. A lawyer's trust account regularly receives wire transfers from unknown remitters in a high risk country and immediately redirects the same funds to the same remitters account in a low risk country
- B. A lawyer's account in a low risk country receives a bank draft from another lawyer firm in a high risk country
- C. A lawyer's trust account receives a large value wire transfer from a publicly listed life insurance company and then immediately transfers the same funds out to an unknown individual in a low risk country
- D. A lawyer's account in a high risk country receives a cash deposit of an amount that is considerable below the reporting threshold
Answer: A
NEW QUESTION # 355
Which is the first valid step in the Mutual Legal Assistance Treaties international cooperation process?
- A. The investigator may remove the evidence collected without asking permission to do so.
- B. The central authority of the requesting country sends a letter of request to the central authority of the other country.
- C. The central authority that receives the request sends it to a local judicial officer to find out if the information is available.
- D. An investigator from the requesting country visits the country where the information is sought and takes statements from the identified witnesses or suspects.
Answer: B
Explanation:
Explanation
The first valid step in the Mutual Legal Assistance Treaty (MLAT) international cooperation process is for the central authority of the requesting country to send a letter of request to the central authority of the other country. The letter of request should provide a summary of the facts and information required, the reasons for the request, and any specific legal or procedural requirements that need to be met. (CAMS Manual, 6th Edition, Page 233).
NEW QUESTION # 356
To guard against acquisition or control of a financial institution by money launderers or their associates, what should supervisory agencies require?
- A. Thorough due diligence on prospective owners
- B. Comprehensive compliance programs
- C. Adequate surety bonds, cash deposits, or equivalencies
- D. Prospective owners have prior experience in the area of finance
Answer: A
NEW QUESTION # 357
What can a compliance officer do in the absence of automated software to conduct U.S. Department of the Treasury Office of Foreign Assets Control (OFAC) sanction screens?
- A. Rely on a credit report from OFAC
- B. Conduct a key-word search on the Internet
- C. Use the consolidated Sanctions List Search screen on the OFAC website
- D. Obtain up-to-date copies of the OFAC's Specially Designated Nationals list
Answer: D
NEW QUESTION # 358
Which is a key reason why a financial institution (FI) conducts an enterprise-wide AML risk assessment?
- A. The board of directors and senior management are required to have an AML risk assessment for the bank.
- B. The need to understand its overall budget needs for each department and for internal audit.
- C. The identification of specific risk categories (i.e., export, inactivity, layman, and false locations) unique to the bank.
- D. The need to assess money laundering and terrorist financing risks and ensure there are adequate controls to mitigate those risks.
Answer: D
NEW QUESTION # 359
Which two aspects of the security broker dealer industry increase its exposure to money laundering?
Choose 2 answers
- A. They easy conversion of holdings to cash with significant loss of principal
- B. Disposing of cash through securities purchases
- C. The routine use of wire transfers from, to or through multiple jurisdictions
- D. Fast paced transactions conducted electronically
Answer: B,D
NEW QUESTION # 360
When and how should an institution appraise the AML risk of a newly developed product?
Choose 3 answers
- A. The institution should roll the product out on a preliminary basis to determine what risks develop with regard to the product
- B. The institution should request the Compliance Officer to review and evaluate the AML risk prior to the product going live
- C. The institution should review previous administrative actions to determine if the product has created problems for other institutions
- D. The institution should evaluated where, how and to what extent the product is going to be used
Answer: A,B,D
NEW QUESTION # 361
Your company develops an API application that is orchestrated by using Kubernetes.
You need to deploy the application.
Which three actions should you perform? Each correct answer presents part of the solution.
NOTE: Each correct selection is worth one point.
- A. Create an Azure container instance.
- B. Create a Kubernetes cluster.
- C. Create a Web App for Containers.
- D. Create an Azure Container Registry instance.
- E. Create a container image file.
Answer: B,D,E
Explanation:
Explanation/Reference:
References:
https://docs.microsoft.com/en-us/azure/aks/tutorial-kubernetes-prepare-app
NEW QUESTION # 362
What do the Financial Action Task Force (FATF) mutual evaluations of each member assess?
- A. The levels of implementation of the FATF Recommendations
- B. If the member has a large enough economy to maintain its membership
- C. The member's ability to send a representative to the plenary sessions
- D. If the member has made any suggestions for updates to the FATF Recommendations
Answer: A
Explanation:
Explanation/Reference: https://www.fatf-gafi.org/publications/mutualevaluations/documents/more-about-mutual- evaluations.html
NEW QUESTION # 363
Which two aspects of precious metals pose the highest risk of money laundering? (Choose two.)
- A. Precious metals can be readily used in many high-tech commercial applications, making them all the more valuable
- B. The value of precious metals can be inflated easily, making it easy to increase the amount of money laundered
- C. Precious metals have high intrinsic value in a relatively compact form and are easy to convert into currency
- D. Some precious metals can be formed into other objects, making easier to transport
Answer: C,D
Explanation:
Precious metals, such as gold and silver, pose a high risk of money laundering because they have some features that make them attractive to criminals. According to the FATF Guidance on the Risk-Based Approach for Dealers in Precious Metals and Stones1, these features include:
Some precious metals can be formed into other objects, making easier to transport. For example, gold can be melted and shaped into jewellery, coins, bars, or other items that can be easily concealed and moved across borders. This makes it difficult for law enforcement and customs authorities to detect and seize the illicit proceeds of crime.
Precious metals have high intrinsic value in a relatively compact form and are easy to convert into currency. For example, gold has a stable and universal value that can be exchanged for cash or other assets in any market. This makes it easy for criminals to store, transfer, and launder their illicit funds without leaving a trace in the formal financial system.
The other two options, C and D, are not as relevant to the risk of money laundering. The value of precious metals is determined by the market forces of supply and demand, and it is not easy to inflate or manipulate it.
Precious metals can be used in many high-tech commercial applications, but this does not necessarily make them more valuable or more prone to money laundering.
References:
1: FATF Guidance on the Risk-Based Approach for Dealers in Precious Metals and Stones, 2008,
https://www.fatf-gafi.org/en/publications/Fatfrecommendations/Fatfguidanceontherisk-basedapproachford
2: Money laundering and terrorist financing risks and vulnerabilities associated with gold, 2015,
https://www.fatf-gafi.org/en/publications/Methodsandtrends/Ml-tf-risks-and-vulnerabilities-gold.html
3: The anti-money laundering framework for precious stones and metals dealers in Singapore, 2021,
https://www.emerald.com/insight/content/doi/10.1108/JMLC-07-2021-0074/full/html
4: Gold and Money Laundering, 2019,
https://www.moneylaunderingnews.com/2019/04/gold-and-money-laundering/
NEW QUESTION # 364
Which of the following represents the first Financial Action Task Force initiative?
- A. The Special Recommendations on Terrorist Financing
- B. The 40 Recommendations on Money Laundering
- C. The Report on Non-Cooperative Countries and Territories
- D. The Report on Money Laundering Typologies
Answer: B
Explanation:
The first Financial Action Task Force (FATF) initiative was the 40 Recommendations on Money Laundering, which were issued in April 1990, less than a year after the FATF was established by the G7 summit in Paris in
1989. The 40 Recommendations aimed to provide a comprehensive plan of action to fight money laundering by setting out the principles and measures for effective legal, regulatory, and operational frameworks at the national and international levels. The 40 Recommendations have been revised and updated several times since then, most recently in 2022, to reflect the evolving trends and techniques of money laundering and to include the issues of terrorist financing and the financing of proliferation of weapons of mass destruction.
The other options are not the first FATF initiative, but they are related to the FATF's work and mandate. The Report on Non-Cooperative Countries and Territories (NCCTs) was launched in 2000 to identify and monitor the jurisdictions that did not comply with the FATF standards and posed a risk to the international financial system. The Report on Money Laundering Typologies was first published in 1996 and has been updated annually to provide an analysis of the methods, techniques, and trends of money laundering and to assist the FATF members and observers in developing effective countermeasures. The Special Recommendations on Terrorist Financing were issued in October 2001, following the September 11 attacks, to complement the 40 Recommendations and to address the specific challenges of combating the financing of terrorism and terrorist acts.
References:
History of the FATF, 1
Financial Action Task Force - Wikipedia, 2
Financial Action Task Force (FATF): What it is, How it Works - Investopedia, 3 The FINANCIAL ACTION TASK FORCE (FATF) - INSIGHTSIAS, 4
NEW QUESTION # 365
A junior account manager within an international private bank in Country A was asked by one of his valued customers, who has held an account for several years in the institution, about depositing a large sum of cash into her account. The junior account manager informed his customer that his bank does not accept cash. The junior account manager later reviewed a customer activity report and noticed a number of smaller dollar wires from banks in neighboring Country B, which has lax currency controls, that totaled about as much as the customer intended to deposit.
What should the junior account manager do?
- A. Close the account
- B. Notify the anti-money laundering specialist of his bank, but do not call the customer
- C. File a suspicious transaction report with the Financial Intelligence Unit
- D. Offer the customer a more secure method of depositing in the hope of learning something moreduring the conversation
Answer: B
NEW QUESTION # 366
A compliance officer was recently reviewing transactional data for an international charity and found transactions that present a higher risk.
Which reason is cause for terminating the banking relationship?
- A. The charity has several incoming international funds transfers
- B. The charity has had a high a high turnover rate of official positions
- C. The flow of funds both in and out are complex and hard to trace
- D. The charity is headquartered in a country on the Office of Foreign Assets Control list
Answer: C
NEW QUESTION # 367
In the summer, an institution identifies anti-money laundering concerns regarding a customer's account activity.
The customer, an ice cream, has deposited a lot of checks drawn on banks in foreign countries, sent large number of high dollar international wires to different countries, made cash deposits of a few hundred dollars every few days and written multiple checks for a few hundred dollars to the same dozen payees every two weeks.
Which two transaction types warrant investigation? (Choose two.)
- A. Repeated checks to the same payees
- B. Checks drawn on banks in foreign countries
- C. The wires to foreign countries
- D. Regular cash deposits
Answer: B,C
NEW QUESTION # 368
You are designing an AI workflow that will aggregate data stored in Azure as JSON documents.
You expect to store more than 2 TB of new data daily.
You need to choose the data storage service for the data. The solution must minimize costs.
Which data storage service should you choose?
- A. Azure Manage Disks
- B. Azure Blob Storage
- C. Azure Data Lake Storage
- D. Azure File Storage
Answer: B
Explanation:
Generally, Data Lake will be a bit more expensive although they are in close range of each other. Blob storage has more options for pricing depending upon things like how frequently you need to access your data (cold vs hot storage). Data Lake is priced on volume, so it will go up as you reach certain tiers of volume.
References:
http://blog.pragmaticworks.com/azure-data-lake-vs-azure-blob-storage-in-data-warehousing
NEW QUESTION # 369
A school teacher recently opened a private banking account with a major bank. The customer indicated annual income of EUR 45,000 and listed her source of wealth as a EUR 1.5 million inheritance from relatives. The customer plans to invest EUR 12,000 to 15,000 earned annually from bearer bonds. The relationship manager verified the client's identity and documented all of the above information in the account file before opening the account. During a routine review of the account, several electronic fund transfers in excess of EUR 5 million each were made from a diamond distributor. The relationship manager also noticed that in each instance, the customer immediately transferred the funds to bank accounts in Hong Kong. Which of the following is appropriate for the anti-money laundering specialist to recommend?
- A. Contact the competent authority and local law enforcement.
- B. Suspend further customer transactions through the bank.
- C. Investigate the source and purpose of the transactions.
- D. Arrange a meeting between the customer and legal department.
Answer: A
Explanation:
The customer's profile and transactions are highly suspicious and indicative of possible money laundering.
The customer's income, source of wealth, and investment plans do not match with the large and frequent transfers from a diamond distributor, which is a high-risk business sector for money laundering. The customer's transfers to Hong Kong, which is a high-risk jurisdiction for money laundering, also raise red flags.
The anti-money laundering specialist should recommend contacting the competent authority and local law enforcement to report the suspicious activity and cooperate with any investigation. This is in accordance with the FATF Recommendation 20, which states that "If a financial institution suspects or has reasonable grounds to suspect that funds are the proceeds of a criminal activity, or are related to terrorist financing, it should be required, by law, to report promptly its suspicions to the financial intelligence unit (FIU)"1. The other options are not appropriate, as they do not address the urgency and severity of the situation.
References: 1: FATF (2012), International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation, FATF, Paris, France, www.fatf-gafi.org/recommendations.html, p. 19.
NEW QUESTION # 370
A bank's anti-money laundering section receives an anonymous tip that a customer might be engaging in possible money laundering.
Which two facts should be considered during the course of an investigation into this matter? (Choose two.)
- A. The customer is issuing a number of wires to several relatively high-risk jurisdictions
- B. The customer has had a long-standing account at the bank
- C. The customer's account has had a large volume of activity, but the month-end balance is usually low
- D. The customer in on the exempt list for currency transaction reporting requirements
Answer: A,C
Explanation:
The customer's wire transfers to high-risk jurisdictions and the large volume of activity with low month-end balance are two facts that should be considered during the course of an investigation into possible money laundering. These facts may indicate that the customer is trying to move funds from or to countries that have weak anti-money laundering (AML) controls, or that are known to be a source or destination of illicit funds12. They may also suggest that the customer is using a technique called "smurfing" or "structuring", which involves breaking down large amounts of cash into smaller transactions to avoid detection or reporting34. The other two facts are not necessarily indicative of money laundering, as the customer may have a legitimate reason to have a long-standing account at the bank or to be on the exempt list for currency transaction reporting requirements.
References: 1: FFIEC BSA/AML Examination Manual, Appendix F: Money Laundering and Terrorist Financing Red Flags, Geographic Concerns, 5; 2: AML Red Flags - What are the Top 10 Indicators?, ComplyAdvantage, 6; 3: FFIEC BSA/AML Examination Manual, Appendix F: Money Laundering and Terrorist Financing Red Flags, Transaction Has Unusual Features, 5; 4: Money Laundering Red Flags | Key Behaviours and Indicators, High Speed Training, 7.
NEW QUESTION # 371
A commission regotorie would be used in which gateway to obtain information from another country?
- A. An FIU request under the Egmont principles
- B. A FATF request
- C. A supervisory channel request with the Basel Committee
- D. An MLAT request
Answer: A
NEW QUESTION # 372
In general, what is an element that a financial institution or business does not have to specifically address in an anti-money laundering program?
- A. A description of its OFAC program to address government watch list screening
- B. A system of internal policies, procedures and controls
- C. An ongoing employee training program
- D. A designated compliance officer with day-to-day oversight over the AML program
Answer: A
Explanation:
According to the Bank Secrecy Act (BSA), a financial institution or business must establish an anti-money laundering (AML) program that includes at least four elements: (a) a system of internal policies, procedures and controls to prevent, detect and report money laundering and other illicit activities; (b) a designated compliance officer who is responsible for overseeing the implementation and effectiveness of the AML program; an ongoing employee training program that covers the legal and regulatory obligations, the risks and red flags of money laundering, and the roles and responsibilities of the staff in the AML program; and (d) an independent audit function that tests and evaluates the adequacy and compliance of the AML program12.
While the Office of Foreign Assets Control (OFAC) is a key agency that enforces economic and trade sanctions against targeted foreign countries, entities and individuals, it is not part of the BSA or the AML program requirements. However, financial institutions and businesses are expected to comply with OFAC regulations and screen their customers and transactions against the OFAC lists of sanctioned parties. Failure to do so may result in civil or criminal penalties34. Therefore, it is advisable for financial institutions and businesses to have an OFAC program that is integrated with their AML program, but it is not a mandatory element that they have to specifically address in their AML program.
References:
1: Financial Crimes Enforcement Network (2020). Anti-Money Laundering Programs
2: ACAMS (2020). CAMS Certification Package (6th Edition)
3: Office of Foreign Assets Control (2023). Sanctions Programs and Country Information
4: Moses & Singer LLP (2023). Anti-Money Laundering, Bank Secrecy and OFAC Regulations
NEW QUESTION # 373
Bank A is located in Country A.
A wire transfer from Bank B located in Country B is processes by Bank A, where the funds are being moved to a customer at Bank C located in Country C.
The wire transfer is deemed suspicious by Bank A.
Who should Bank A file a suspicious transaction report on?
- A. Bank C in Country C
- B. The transaction in Country B
- C. Bank B in Country A
- D. The transaction in Country A
Answer: D
NEW QUESTION # 374
An anti-money laundering specialist notes a significant reduction in suspicious transaction report filings at a particular branch. Which of the following actions is most appropriate?
- A. Analyze the branch activity reports to determine whether there has been a decrease in branch activity.
- B. Review staff records to see whether inexperienced personnel are in critical positions without appropriate training.
- C. Review branch exception reports to determine changes in activity in accordance with customer profiles.
- D. Place the branch on the watchlist to assure a review during the next quarter.
Answer: A
NEW QUESTION # 375
Normal account-opening procedures reveal a customer who contacted a financial institution to open a bank account is the brother of a prominent member of a foreign judiciary. Which of the following actions should the anti-money laundering specialist recommend immediately?
- A. File a suspicious transaction report with the competent authority.
- B. Monitor the customer's account.
- C. Contact the institution's legal advisor.
- D. Perform enhanced due diligence.
Answer: D
Explanation:
A customer who is the brother of a prominent member of a foreign judiciary is considered a politically exposed person (PEP) or a family member of a PEP. PEPs are individuals who hold or have held positions of public trust or influence in a foreign country, such as heads of state, senior politicians, high-ranking military officers, judges, or executives of state-owned enterprises. PEPs pose a higher risk of money laundering, corruption, or bribery due to their access to public funds, influence over policy decisions, or connections to other powerful individuals. Therefore, financial institutions are required to perform enhanced due diligence (EDD) on PEPs and their family members, as well as monitor their transactions and activities more closely.
EDD is a set of additional measures that go beyond the standard customer due diligence (CDD) to obtain more information about the customer, such as their source of wealth, source of funds, expected account activity, business relationships, and reputation. EDD also involves conducting ongoing reviews and updating the customer risk profile regularly. EDD helps the financial institution to mitigate the risks associated with PEPs and detect any signs of money laundering or other illicit activities.
References:
ACAMS Study Guide1, Chapter 2: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), pages 51-52 FATF Guidance on Politically Exposed Persons2, pages 9-10, 13-14, 17-18 Wolfsberg Group Guidance on Politically Exposed Persons3, pages 2-3, 6-7
NEW QUESTION # 376
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The CAMS exam is designed to test the candidates' knowledge of AML laws, regulations, and best practices, including customer due diligence, suspicious activity reporting, sanctions screening, risk assessment, and compliance monitoring. CAMS exam consists of 120 multiple-choice questions, and candidates have four hours to complete it. The passing score for the exam is 75%.
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